Last checked at 
LONDON (Alliance News) - Africa-focused oil and gas firm BowLeven PLC on Wednesday said shareholder Crown Ocean Capital P1 Ltd has continued purchasing shares in the London-listed business after requisition a meeting in an attempt to oust the board.
Last month, Crown Ocean requisitioned a general meeting of BowLeven to remove six of its current directors, proposing two replacements. At that time, it held an 11% stake in the business.
BowLeven initially responded by describing the efforts as "self-serving" and a "blatant attempt by Crown Ocean Capital to try to attain control of the business".
Crown Ocean is nominating Eli Chahin and Christopher Ashworth for appointment as directors. Chahin is senior advisor at corporate restructuring firm Alix Partners, while Ashworth was previously a partner at law firm Ashurst LLP. Chahin and Ashworth would join Bowleven's Chief Operating Officer David Clarkson on the board of directors, with Chahin serving as interim chief executive officer "if necessary".
Crown Ocean said it wants the proposed directors to drive a new direction in the company, concentrating on its Etinde project and ceasing spending on its Bomono project, both in Cameroon. Crown Ocean also urges cutting the spending of the company and returning excess cash to shareholders.
Crown Ocean said Bowleven has seen "significant shareholder value destruction", with its cash holdings exceeding market value at the end of 2016 and a "material risk" of spending all its remaining cash. Crown Ocean also noted the reduction of Bowleven's interest in Etinde to 20% and its ceding of the operator role, while an estimated USD100.0 million has been spent on the Bomono project.
On Wednesday, BowLeven continued its attack on Crown Ocean, stating the shareholder has continued to buy stock since requisitioning the meeting. The company said, ahead of the general meeting and in light of recent purchases by the shareholder, that it "wishes to advise all shareholders of its view on key aspects of the Crown Ocean Capital proposals and why the board will unanimously be recommending shareholders vote against all resolutions."
BowLeven said Crown Ocean's intent is to take control of the board without paying fair value for the business, stating it has "no credible strategy".
"Crown Ocean Capital's stated intention is to convert BowLeven into a holding company," BowLeven said. "Stripping the cash from BowLeven's balance sheet and leaving it in a precarious position potentially unable to fund the investment necessary to realise any or all value from its Cameroon assets; this substantially weakens its' bargaining position."
BowLeven said supporting the proposals would place the management of the business into the hands of a minority shareholder, stating this would also lead to key relationships being lost, such as that with the government of Cameroon.
BowLeven said its own strategy offers the best way forward to maximise value for shareholders, boasting USD95 million in cash and no debt. The company said it must retain sufficient financial flexibility in order to realise maximum value from Etinde and said Bomono, after a lot of time and effort, is "on the cusp of delivering value through development and farm-out".
The company said Crown Ocean plans to stop the current plans needed to "bring this to fruition".
"Ahead of our formal response, we wish to give timely advice to shareholders that Crown Ocean Capital's proposal has absolutely no merit. It is self-evidently, and solely, a means to turn Bowleven into a cash dispenser for themselves, by taking control of the Board," said Chairman Billy Allan.
"By contrast the company is progressing exciting plans at Etinde and Bomono that have the potential to deliver material upside. We see a clear choice for shareholders between losing control of the company, or retaining substantial upside in an E&P company at a favourable point in the market cycle," Allan added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2017 Alliance News Limited. All Rights Reserved.
